Gates uses final CES keynote to tout “next digital decade”

Bill Gates used his final keynote at CES to announce some new video …

LAS VEGAS—Bill Gates took the stage at the Consumer Electronics Show for the final time tonight to talk about Microsoft's accomplishments in 2007 and what the new year has in store for the software giant. Unlike last year's keynote, which brought announcements of Windows Home Server and Microsoft Sync, there was very little in the way of new products and major announcements. Indeed, Gates' final keynote was lackluster in comparison to those of years gone by. Instead of announcing grand new initiatives and cool products (remember the original Xbox launch in 2001?), this time around Gates (and Robbie Bach) contented themselves with updates on Microsoft initiatives announced at last year's CES, a brief demo and overview of Microsoft's plans for Surface, and a couple of low-key announcements, including a new partnership between Microsoft and Disney/ABC to bring the programming such as Hannah Montana and Grey's Anatomy to Xbox Live.

Gates, who is stepping down from his day-to-day responsibilities in July, began his speech by reviewing the milestones of the "first digital decade," recounting the technological advances of the past 10 years before launching into Microsoft's vision of the "next digital decade. "The First digital decade has been a resounding success," Gates aid. "There's nothing holding us back from going much faster and much further in the second digital decade."

According to Gates, all media and entertainment will be software driven, and Microsoft plans to provide the platform to make it all happen. The next digital decade will be user-centric and focused on connecting people and connecting experiences, with three key elements underlying the advances to come: HD everywhere, seamless service connections for users, and natural interfaces—speech, touch, and gestures. Windows will be the key element for all of it.

Gates then talked about some of the milestones Microsoft has recently hit. There are now over 100 million Vista users and 420 million Windows Live users. Windows Mobile has seen great growth as well, with Gates saying that there were over 10 million new Windows Mobile users added in 2007, a figure that should double this year. After Mika Krammer, the director of Windows Client Mobility at Microsoft gave a brief demo of Windows Live, Gates then spent some time on Microsoft Surface.

Bill Gates customizing a snowboard with Surface

Microsoft has high hopes for Surface, which the company hopes to see make a splash in retail and even in the home. Gates gave a demo of Surface in a retail environment, using the device to customize a snowboard, including decals, bindings, and even a signature on the bottom. He then placed a phone on the Surface and uploaded a picture of his new board to the Internet. "It's a fun, simple retail experience," he said. "We see Surface showing up in a lot of different areas."

Turning to Silverlight, Microsoft's "Flash-killer" introduced at last year's MIX07 Conference, Gates announced a major partnership with NBC, which will use the rich media platform for its online coverage of the 2008 Summer Olympics in Beijing. Users will be able to customize over 3,000 hours of coverage to focus on the athletes, sports, and countries of their choosing. "It will be the ultimate digital destination," NBC sports anchor Bob Costas said in a video.

The Robbie Bach era at CES?

Oddly enough, that was the end of Gates' participation in the keynote for all intents and purposes. The new face of Microsoft at CES will likely be Robbie Bach, the president of Microsoft's entertainment and devices division, who took over from Gates to talk about the company's successes in music, gaming, and other entertainment over the past 12 months.

Bach began by touting the performance of the Xbox 360. Microsoft has shipped 17.7 million of the consoles since its launch, he told the audience, with over 10 million users on Xbox Live. The company has done $3.5 billion of business on the 360 through November 2007, a figure Bach said was $1 billion more than the Nintendo Wii and $2 billion more than the PlayStation 3. Bach also noted that the amount spent on 360 games was more than that of the PS3 and Wii combined.

Bach then moved to the two major announcements of the night. ABC and Disney will be bringing many of their popular series to Xbox Live's video storefront. "It's a tremendous opportunity to expand video content on the Xbox," Bach said. In addition, MGM will be bringing its library of films to the service. (Bach did not say whether the ABC/Disney programming will be available in HD).

Microsoft also announced a new DVR anywhere feature for its Windows Media Center PCs and Media Center Extenders. Users will be able to record shows in one place and then watch it on any TV in the house. Samsung and HP will also be announcing new TVs with Media Center Extenders built-in during CES. And the set-top box functionality for the Xbox 360 that was unveiled at last year's CES keynote will finally begin appearing, with British Telecom becoming the first operator to provide the Xbox 360 set-top box experience.

Bach then turned to the Zune, announcing that Microsoft will begin selling the digital media player outside of North America for the first time later this spring. Recognizing Apple's dominant position in the market, Bach said that the Zune is "becoming the clear alternative to the iPod," and then brought Molly O'Donnell from the Xbox group to do a demo of the Zune Social's new features.

Bach and O'Donnell then wrapped up with a demo of some of the speech search functionality coming to Windows Mobile, using Tellme's upcoming Say and See functionality to locate a showing of Sweeney Todd and purchase tickets from the cell phone. Bach made a point of touting Windows Mobile's potential as an advertising platform, noting that the mobile advertising market was projected to hit $11 billion by 2011.

Slash rocking out at CES

Gates then came back onstage to challenge Bach to a Guitar Hero 3 demo, and the keynote ended with former Guns N Roses axeman Slash coming onstage to shred through the opening of "Welcome to the Jungle."

Overall, the keynote was a bit of a disappointment, especially compared to the last couple of years. It seemed indicative of the mood at CES this year, however. Although all of the usual players are here, there doesn't appear to be the same kind of buzz surrounding the show as in years gone by.

If you want to watch the 60-minute keynote yourself and have Silverlight installed, Microsoft has posted the keynote video.